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Harnessing the Winds at Spanish Fork Canyon: Four –Year Struggle and Economic Analysis. Cathy L. Hartman, Ph.D. and Edwin R. Stafford, Ph.D . Co-Directors Center for the Market Diffusion of Renewable Energy and Clean Technology Western Extension Directors Conference

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harnessing the winds at spanish fork canyon four year struggle and economic analysis

Harnessing the Winds at Spanish Fork Canyon: Four –Year Struggle and Economic Analysis

Cathy L. Hartman, Ph.D.

and Edwin R. Stafford, Ph.D.

Co-Directors

Center for the Market Diffusion of Renewable Energy and Clean Technology

Western Extension Directors Conference

Thanksgiving Point, Utah

April 1, 2009

november 2004
November 2004
  • Dean Davis, Windward Engineering -- “small turbine” test site
  • Class 6 – “outstanding” wind resources
evidence of spanish fork s wind resource
Evidence of Spanish Fork’s wind resource

Davis contacts

Tracy Livingston

of Wasatch Wind

wasatch wind
Wasatch Wind
  • Wind Project Development
  • Space frame towers
  • Crane-free “Hi-Jack” system
utah wind map 2003
Utah Wind Map (2003)

Spanish Fork is not on the map!

tracy s five year journey key barriers facing the spanish fork project
Tracy’s five year journey!Key barriers facing the Spanish Fork Project
  • Municipal, state, and federal policies
  • Siting issues
  • Market uncertainties
  • Turbine shortage
  • Procuring investors
  • NIMBY – Community concerns
first hurdle gaining local approval
First Hurdle: Gaining Local Approval
  • April 2005 – Wasatch Wind distributes 3000 flyers to residents within one mile of site
  • Only 50 residents attend meeting
  • Livingston presents plan
siting studies
Siting Studies
  • Noise level at 50 decibels = traffic noise on nearby Highway 6 between 1 a.m. and 4 a.m.
  • Avian study – no threat identified
community and environmental benefits
Community and Environmental Benefits
  • Land leases
  • Property tax revenues
  • Dividends to investors
  • Reduced coal-fired power pollution
citizen response is mixed
Citizen response is mixed…

“… the ugliest and most ungodly thing you’ve ever seen.”

citizen response is mixed1
Citizen response is mixed…

“… the ugliest and most ungodly thing you’ve ever seen.”

“… with windmills, I can see the mountains. With haze from coal plants, I can’t see the mountains.”

zone application with city council june 2005
Zone application with City CouncilJune 2005
  • Wasatch Wind applies for re-zoning
  • Residents, again, divided:

“It’s going to detract from our mountains”

“It will be an improvement as the gravel pit is already an eyesore”

“It is a better alternative to mass suburban development”

spanish fork wind project is a go
Spanish Fork Wind Project is a go!

Destined to become the nation’s most urbanized wind project!

second hurdle negotiating financial agreement and investors
Second Hurdle: Negotiating Financial Agreement and Investors
  • Negotiation of power purchase agreement (PPA) with Rocky Mountain Power (2004-06)
  • Procurement of equity investors
negotiating with rocky mountain power
Negotiating with Rocky Mountain Power
  • Monopoly utility for most of Utah – Not a free market!
  • Key issues:
    • No established cost-determination method
    • Needed to set Utah pricing policy
negotiating with rocky mountain power1
Negotiating with Rocky Mountain Power
  • Avoided cost – “old coal versus new wind”
  • Livingston’s breakeven 6 cents per kWh
negotiating with rocky mountain power2
Negotiating with Rocky Mountain Power
  • Avoided cost – “old coal versus new wind”
  • Livingston’s breakeven 6 cents per kWh

Rocky Mountain Power offers only 4.7 cents per kWh

Public Service Commission steps in

public service commission
Public Service Commission
  • Least Cost/Least Risk Mandate
  • Oldcoalwas cheaper than newwind– but is it less risky?
  • Livingston argued that “least cost” mandate emphasized “plan for today, but not for the future”
contract settled june 2006
Contract settled June 2006
  • Livingston procures 5 to 6 cent per kWh deal with RMP
  • Delay results in loss of key investor, John Deere
third hurdle re gaining local approval 2006 07
Third Hurdle: Re-gaining local approval (2006-07)
  • January 2006, local TV channel re-broadcasts the April 2005 zoning approval meeting…
third hurdle re gaining local approval
Third Hurdle: Re-gaining local approval
  • January 2006, local TV channel re-broadcasts the April 2005 zoning approval meeting…
  • Re-broadcast sparks public outcry – citizens demand moratorium
citizens aired their concerns
Citizens aired their concerns…

“Monstrous, colossal, shocking…”

Property values “will plummet … if turbines are erected”

“I’m not against ‘green energy,’ but we’ve been poorly informed”

citizens aired their concerns1
Citizens aired their concerns…

“Monstrous, colossal, shocking”

Property values “will plummet … if turbines are erected”

“I’m not against ‘green energy,’ but we’ve been poorly informed”

Livingston caught completely off-guard!

joe thomas new mayor
Joe Thomas, new Mayor
  • Spanish Fork wind project – his first order of business!
  • Mayor Thomas asks residents to:
  • “Open your mind up and let one word in … think – options!”
  • Appoints a three-member resident board
joe thomas new mayor1
Joe Thomas, new Mayor
  • Spanish Fork wind project – his first order of business!
  • Mayor Thomas asks residents to:
  • “Open your mind up and let one word in … think – options!”
  • Appoints a three-member resident representative board

March 2006, compromise reached – wind park to move up the canyon !

new compromise plan
New compromise plan
  • City had to annex new project location
  • New land leases had to be signed
  • Water well issue had to be approved
outcomes of compromise
Outcomes of compromise

Time delay cost Wasatch Wind an additional $300,000 , but …

The process brought greater trust between Wasatch Wind and the residents of Spanish Fork

fourth hurdle re negotiating with investors
Fourth Hurdle: Re-negotiating with Investors
  • In 2006, legislature fails to renew the sales tax credit
  • Legislature eventually renewed the credit in 2007… however…
turbine shortage increased production costs in 2007
Turbine shortage/increased production costs in 2007
  • Falling dollar drives up costs (increased 17% in 2006 and another 14% in 2007)
  • Turbine shortage due to booming growth – 18 month back-order (imported from outside U.S.)
turbine shortage increased production costs in 20071
Turbine shortage/increased production costs in 2007
  • Spanish Fork offers 70 percent property tax reduction

“We’re going to rebate something we never would have gotten in our lives, and we get to keep a big chunk of it, so it was a no-brainer.”

Mayor Joe Thomas

edison mission energy has turbines
Edison Mission Energy has turbines!
  • Takes over project
  • Tracy Livingston and Wasatch Wind continue to be advisors
lessons learned
Lessons learned
  • Outreach and engagement – policymakers and citizens within the “view shed” of the project
lessons learned1
Lessons learned
  • Outreach and engagement – policymakers and citizens within the “view shed” of the project
  • Build relationships with local champions – Dean Davis, Mayor Joe Thomas, ex-foes
lessons learned2
Lessons learned
  • Outreach and engagement – policymakers and citizens within the “view shed” of the project
  • Build relationships with local champions – Dean Davis, Mayor Joe Thomas, ex-foes
  • Explore compromises
lessons learned3
Lessons learned
  • Outreach and engagement – policymakers and citizens within the “view shed” of the project
  • Build relationships with local champions – Dean Davis, Mayor Joe Thomas
  • Explore compromises
  • Persistence
economic outcomes reategui stafford and hartman 2009
Economic outcomes(Reategui, Stafford and Hartman 2009)
  • Construction
    • $4 million in economic output during construction
    • Supported 38 jobs, totaling $1.4 million
  • Operations in 2009
    • $74,000 land lease payments
    • $112,000 local property taxes*
    • $84,000 for Nebo School District*
    • Supports 7 jobs total (2 on-site)
    • $576,000 in economic output

* Reflect 70% revenue reduction incentive

center for the market diffusion of renewable energy and clean technology
Center for the Market Diffusion of Renewable Energy and Clean Technology

Cathy L. Hartman

Edwin R. Stafford

Energy

Transportation

Marketing & Public Policy

Buildings